Developers must understand how federal and state regulatory policies may delay the real estate development process.
THE U.S. CONGRESS passed the Endangered Species Act (ESA) in 1973 under then President Richard Nixon. Its primary goal was to protect native plants and animals facing potential extinction. The Act has been amended several times and broadened to protect not only particular species, but also the habitats that support them. Species may be listed as either “threatened,” meaning they are at risk for significant population declines, or “endangered,” typically meaning the population has already fallen to very low levels and is at risk of extinction. The ESA has more recently been used by groups environmental to further political agendas. They do so by exploiting vulnerabilities in the ESA to advance regulatory policies that can place an undue burden on real estate development.
New Listings, Broad Impacts
Newsworthy examples of listed animal species that have halted or delayed commercial development projects in recent years include the desert tortoise in the Southwest, the northern spotted owl in the Pacific Northwest and the delta smelt on the West Coast. More recently, the January 2016 listing of the northern long-eared bat (NLEB) as threatened is anticipated to have significant economic impacts on multiple real estate development project schedules. The NLEB has an unprecedented distribution that includes 38 states as well as Washington, D.C.; its vast range spans from Montana to Maine and from southern Canada as far south as Mississippi, Alabama and Georgia. The Indiana bat, which has been listed as endangered for decades, has a smaller but still significant multistate range overlapping that of the NLEB.
The combination of these two bat listings and the continued evolution of regulatory management practices for protecting federally endangered species requires early attention by anyone planning to develop a commercial real estate project within the known range of these species. Because both rely heavily on trees for roosting and rearing their young, any proposed development project within their known range that involves removing trees, including clearing for new development, faces new U.S. Fish and Wildlife Service (USFWS) restrictions on how, when and how many trees can be cleared. As of Feb. 16, 2016, tree clearing within a 150-foot radius of known NLEB maternity roosts is restricted or prohibited between May 15 and July 31 (pup season). Typically, any clearing within a quarter-mile of known hibernacula, the caves or abandoned mines where the bats hibernate, is restricted year round. Tree clearing within areas in which the presence of Indiana bats has been proven or previously known may be prohibited altogether, unless the developer agrees to undertake time-consuming and costly habitat mitigation.
Plant species listed as endangered or threatened — such as running buffalo clover, which can be found in Indiana, Kentucky, Missouri, Ohio and West Virginia; or snow trillium, which can be found in 14 Midwestern states — can also have significant impacts on development projects across the U.S. The identification of the possible existence of listed plants is often overlooked in the due diligence process, as it can be difficult to distinguish listed plants from other, more common species, and because many developers do not realize that the ESA protects plants as well as wildlife. The identification of a listed plant late in the development process can have disastrous economic impacts for the developer. Therefore, the importance of identifying the possible presence of listed plants early in the due diligence process cannot be overstated.
Even insects can be federally protected under the ESA. The USFWS recently proposed listing the rusty patched bumble bee (Bombus affinis) as an endangered species. A 60-day public comment period closed on Nov. 21, 2016.
Interpretations May Vary
The USFWS has at least one field office in every state. Each field office may take a different approach to interpreting the ESA as it relates to federally listed species. One factor that may influence a field office’s interpretation of the ESA is that office’s location within the range of a certain species. This factor alone can significantly impact project schedules and create unpredictability if a developer fails to take the proper steps to identify potential listing-related restrictions.
Many states also have their own rare, threatened or endangered species listings, which are regulated by state agencies. The restrictions on development imposed by those agencies vary from state to state, and may even vary between regions within a state. They may include restrictions on clearing, grading, mowing and even chemical application, as well as light pollution restrictions. In some cases, development may be completely prohibited if a listed species is identified as using the habitat on the proposed site.
Some states assume that a species is present if it is known to occur in a particular region. In this case, a developer must prove “probable absence” via a biological or other survey prior to proceeding with land disturbance. In many cases, these surveys can only be conducted during certain times of the year, which can lead to additional delays. For example, in the case of the NLEB and Indiana bats, a mist-net survey, which typically can only be conducted between June 1 and August 15, may be required to prove the probable absence of these species on a proposed development site if schedule constraints make it impossible for a developer to adhere to winter tree-clearing restrictions.
Developers must understand how each USFWS field office and state agency interprets development limits and time-of-year restrictions as well as the distribution of any listed species that may be present on a proposed development site. Developers would be prudent to coordinate with these agencies and understand any local nuances relating to an office’s interpretation of the ESA. New species may be listed during the development process and sites often are not “grandfathered” in, so developers also must be aware of proposed listings.
Endangered species assessments should be included as part of the due diligence process for any development project. Proper planning related to federal- and state-listed species is especially important, given time-of-year restrictions relating to tree clearing and bat surveys. Timely planning and consultation with the local USFWS field office and state agency are critical to avoiding unplanned and potentially costly construction delays.